Clover Health Raises $100 Million To Launch A Big Data-Driven Insurance Plan

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Silicon Valley-based health insurance startup Clover Health raises a $100 million funding round led by First Round Capital. Athyrium Capital Management, an asset management company that organizes private equity and debt financing also participated in the round. The new round was was a mix of debt and equity-backed funding, but financial details outlining the structure of the deal and how much was debt or equity backed were not disclosed. The new funding is a massive first round for a startup that seems to believe it has discovered the secret to controlling costs while delivering care to a primarily elderly patient population.

Launched in 2014, Clover Health is currently piloting its business model in six counties, all within New Jersey. CEO Vivek Garipalli has ambitions of taking on Medicare and traditional private insurers and, unlike other new technology-focused health insurers like New York’s Oscar Health, Clover is not avoiding the elderly market, rather its targeting it. Clover Health is a Medicare Advantage insurance plan, a federal program that allows people who are over 65 and have certain disabilities to use a private insurer. Garipalli explains, “You imagine a Medicare patient goes to a primary doctor’s office, goes to a cardiologist, goes to a hospital, there is no quarterback for that data. No one has the time or the data to guide that patient and coordinate all those interactions and make sure each provider gets the right info at the right time.”

From a technology perspective, the team behind Clover Health is building tools to help it extract and normalize data from the unstructured claims forms that are being submitted by providers across the patient’s care team. This information is used for a number of things, from calculating various risk levels to monitoring medication adherence. If the startup’s algorithms detect a problem, Clover Health dispatches its own nurse practitioners to make a house call. The same NPs are also sent to the homes of anyone that has recently been discharged from the hospital to help reinforce patient education topics and answer any questions about their discharge instructions. This early intervention is key to Clover’s overall strategy. The company engages with its insured patients early and often in hopes of reducing hospitalizations. Thus far in 2015, Clover’s patients were admitted 50 percent less than Medicare patients living in the same area. Clover also saw 34 percent fewer hospital readmissions. For each avoided hospitalization, Clover saves an average of $10,000.

Now, with a pilot program that seems to validate its business plan and $100 million in fresh capital, Clover Health will ramp up its operations and begin offering its insurance plan in more states.


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